BAM Key Details:

  • Housing market economists are not unanimous in their forecasts on home price trends for 2024. 
  • Fannie Mae, CoreLogic, Zillow, and the National Association of Realtors (NAR) are forecasting year-over-year increases in home values, despite high mortgage rates and low affordability. 
  • Moody’s Analytics and Morgan Stanley are predicting single-digit national home price declines in the coming year. 

Home prices have increased by 44% since March 2020. Add mortgage rates rising from 3% to 8%, and we’ve got what Lance Lambert describes as the “fastest-ever deterioration in housing affordability.” 

That said, what can we expect in the coming year, especially if rates do begin to drop (as, historically, they tend to do)? 

Economists predicting an increase in home values in 2024

We looked to the following data sources for their forecasts on home price trends for 2024, as well as expectations for the end of 2023: 

The first four are in agreement that home prices will continue to show year over year increases, though with varying growth rates. 

According to the last two, however, a single-digit decline in home prices is possible over the next 12 months. 

Fannie Mae

Fannie Mae has updated its housing price forecast with an upward revision for its home price growth projection for 2023. The Fannie Mae Home Price Index (FNM-HPI) now predicts home prices will have grown by 6.7% on a Q4/Q4 basis (2022–2023), up from their previous forecast of 3.9%. 

That upgrade is due mainly to higher-than-expected incoming transaction data during the third quarter. Home prices have held up better than expected given higher mortgage rates and record low affordability. 

Looking ahead, Fannie Mae economists still expect home price growth in 2024 to decelerate to 2.8% on a Q4/Q4 basis. 

Personal consumption has not only remained resilient, but recent official data revisions indicate that the consumer has been in a better position than previously thought, increasingly the likelihood of an economic ‘soft landing. However, despite consumer resiliency, the recent rise in interest rates has been precipitous, and in past environments – even with less severe interest rate shocks – this has led to economic dislocations. As such, we still expect to see a mild economic downturn in the first half of 2024. While the rate of inflation has slowed and continues to slow, we continue to take the Federal Reserve at its word that rates will be ‘higher for longer’ until annual inflation stabilizes at the two-percent target; though at this time, in part because of the recent run-up in long-term rates, we do not expect additional Fed rate hikes.

In many ways, the housing market experienced four years of business in a two-year period between mid-2020 and mid-2022. With ongoing affordability constraints and rising mortgage rates, much of that activity has essentially been given back. We expect the higher mortgage rate environment to continue to dampen housing activity and further complicate housing affordability into 2024.

Doug Duncan

Fannie Mae Senior Vice President and Chief Economist


The CoreLogic Home Price Index (HPI) Forecast shows home prices increasing year over year by 3.4% from August 2023 to August 2024—following an annual increase of 3.7% from August 2022 to August 2023. 

While continued mortgage rate increases challenge affordability across U.S. housing markets, home price growth is in line with typical seasonal averages, reflecting strong demand bolstered by a healthy labor market, strong wage growth and supporting demographic trends. Still, with a slower buying season ahead and the surging cost of homeownership, additional monthly price gains may taper off.

Selma Hepp

Chief Economist for CoreLogic


Source: CoreLogic

Meanwhile, three Florida markets rank among the top five U.S. metros at high risk of home price decline, with Spokane, Washington sitting at the top of the list, according to the CoreLogic Market Risk Indicator (MRI). Spokane—Spokane Valley has a “very high” (greater than 70%) probability of falling home prices over the next 12 months. Florida is next in line with Cape Coral–Fort Myers, as shown in the table below. 


Source: CoreLogic


Zillow revised downward its forecast for national home prices after an uncharacteristic month-over-month decline in September amid rising mortgage rates. 

The forecast for the national Zillow Home Value Index (ZHVI) indicates an annual growth rate of 3.3% in 2023, down from last month’s (September) forecast of 4.3%. 

The forecast for national ZHVI growth from September 2023 through September 2024 is 2.1%, down from last month’s forecast of 4.9% annual growth from August 2023 to August 2024. 

Zillow’s prediction for existing home sales in 2023 held steady at 4.1 million, representing an annual decline of 18%. The outlook on for-sale inventory has it remaining near historically low levels, limiting home sales and maintaining upward pressure on home prices. 

The lock-in effect is still keeping many would-be sellers out of the market, holding onto their lower rates. And while many would-be buyers have been priced out, enough remain to create competition for the few homes available. 


Source: Zillow

National Association of Realtors (NAR)

In July, Lawrence Yun, chief economist for the National Association of Realtors (NAR) predicted home prices would rise by 2.6% in 2024. Because while new home construction has been increasing in recent months, we’re still short about 3.8 million housing units (for both sale and rent). 

There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.

Lawrence Yun

NAR Chief Economist

Despite higher home prices and mortgage rates, many homes on the market in July were still receiving multiple offers. 

That said, with today’s mortgage rates at 8%, more buyers are likely to find themselves priced out of the market, especially as the income required to buy a median-priced home is now more than $100,000

Economists predicting a decline in home values in 2024

Both Moody’s Analytics and Morgan Stanley predict a decline in home values in the coming year. 

Moody’s Analytics

Moody’s is forecasting a 3.5% decrease in home prices between Q4 2023 and Q4 2024, arguing it’s “premature to celebrate the end of the housing correction.” 

Based on earlier estimates that the national housing market was more overvalued in the second quarter of 2022 than during the 2006 housing bubble, Moody’s expects a continued correction, though to a lesser extent than predicted earlier this year

The steepest drops in home values will come in the most highly overvalued markets, including Boise, Phoenix, Austin, and Nashville.

Morgan Stanley

A recent ResiClub article by Lance Lambert quoted a note sent out by Morgan Stanley analysts with confirmation that what we’re now seeing is the “fastest-ever deterioration in housing affordability” and that the monthly mortgage payment on a median-priced home is up 27% year over year and up 120% from what it was at mortgage rate lows around 2.5 years ago. 


On Tuesday, October 17th, Morgan Stanley wrote the following to investors:

If home sales remain at these levels for an extended period of time, we become even more reliant on inventory staying at record lows to prevent home prices from falling. In our view, even a 5% growth in inventory next year would yield a 5% drop in [national] home prices by December 2024 if it came alongside zero increase in [U.S. home] sales.

Takeaways for real estate agents

As we get closer to the end of 2023, forecasts for the coming year are likely to change, at least to some degree. Keep yourself informed and up to date by tuning in for the Hot Sheet five days a week and for the Knowledge Brokers Podcast on Fridays. 

Then share what you learn with your clients and prospects to help them better understand the housing market and make smart decisions for their financial future. May none of your clients ever have to call you to say they have to sell the home you helped them buy because they can’t afford it.